FreshTec: Revolutionizing Fresh Produce

Abstract

Entrepreneurial produce packaging firm, which has developed a disruptive technology that keeps fresh produce and flowers fresh for significantly longer, faces strategic growth decisions. CEO Bob Wright must decide how best to bring his company's unique packaging product to market. The technology holds promise after a long development phase but the packaging is more expensive and Wright and his team must convince the industry stakeholders of the packaging's value.

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This case describes the business model and workplace philosophy of NatureSweet, a privately owned, vertically integrated greenhouse grower and marketer of fresh tomatoes with sales across the U.S. and $329 million in 2016 revenues. CEO Bryant Ambelang treated NatureSweet more like a consumer-packaged goods manufacturer than an agricultural producer, with a focus on consistency, branding, margin and price stability, and a frontline-worker-centric production model inspired by the Toyota Production System. Workers—who, because of NatureSweet’s year-round greenhouse production model, were employed full time—were empowered with training and productivity incentives, allowing them to earn well above the minimum wage and advance their careers within the company. Indeed, improving the lives of workers was the explicit purpose of NatureSweet’s operations. Through its financial incentives, personal and professional development initiatives, and worker-appreciation programs, NatureSweet had cultivated a truly unique, uplifting workplace culture in its Mexico operations. Ambelang aspired to replicate the model in the U.S. as a way of demonstrating the potential to “transform the lives of agricultural workers in North America.” But in late 2017, the Arizona-based production operations that NatureSweet had acquired in 2014 were still struggling to attain the successes achieved in Mexico. This case describes NatureSweet’s history, achievements in Mexico, and challenges in Arizona, inviting students to evaluate the keys to NatureSweet’s success in Mexico and analyze their potential for replication in the U.S. Will Ambelang succeed in Arizona, and in doing so demonstrate that it is possible to transform the lives of agricultural workers in North America?

In December 2017, Marc Freed-Finnegan and Jonathan Wall, the co-founders of retail technology company Index, had to discuss the company’s direction as they entered 2018. Five years earlier, Freed-Finnegan and Wall had founded Index after observing the technological advantages that Amazon and other online retailers had over brick-and-mortar retailers. Index’s first product was a customer database tool that allowed brick-and-mortar retailers to collect customer contact information (e.g., email addresses) at the time of checkout. Index soon added automated marketing tools and payment/security tools (e.g., encryption) to its product portfolio. However, selling to large retail chains had proved challenging—many stakeholders were involved in the buying decision, creating a long sales process, and some retailers did not understand why they should trust a small, young company with their payment security. By late 2017, Index had made some changes to reduce the average sales cycle, but there was still room for improvement. Now, Index was preparing to launch a new product, Index Connect, that would essentially allow retailers to pool customer contact data and be more competitive with Amazon. Participants must evaluate whether Index was taking the right approach to sales and marketing and consider how the company could position Index Connect to be a success.

The June 2017 news that e-commerce giant Amazon was paying $13.7 billion for organic supermarket chain Whole Foods precipitated a broad sell-off in the shares of grocery retailers and suppliers. Behind the precipitous declines lay recognition that Amazon’s bold move into brick and mortar assets offered transformational opportunities. Amazon could gain expertise in perishable product sales and procurement, plus access to 30 million well-off shoppers and 463 grocery stores in key U.S. markets. Whole Foods could absorb Amazon’s technology and process expertise to modernize and reduce its operating costs, which were among the highest in the industry. For grocery retailers and suppliers, the deal portended increased competitive pressures in a saturated market. As 2018 dawned, all parties were assessing the deal’s implications. Had the stock market overreacted to news of the deal? Why was Amazon buying Whole Foods? What were the long-term implications of the deal for the food value chain?